Item 1.01. Entry into a Material Definitive Agreement.
Purchase Agreement
On December 1, 2017, TTM
Technologies, Inc., a Delaware corporation (the
Company
), Anaren Holdings LLC, a Delaware limited liability company (the
Seller
), and Anaren Holding Corp., a Delaware corporation and a direct, wholly owned
subsidiary of the Seller (
Anaren
), entered into a definitive stock purchase agreement (the
Purchase Agreement
) pursuant to which the Company agreed to purchase from Seller all of the issued and outstanding
common stock of Anaren for a purchase price of $775 million in cash, subject to customary working capital and certain other adjustments (the
Acquisition
).
The Acquisition has been unanimously approved by the board of directors of the Company.
Consummation of the Acquisition is subject to the satisfaction of certain conditions, including (i) expiration or termination of the applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) clearance by the Committee on Foreign Investment in the United States and by the Defense Security Service, and (iii) the absence of any order,
injunction or law preventing or prohibiting the consummation of the Acquisition.
The Companys obligation to consummate the transactions contemplated
by the Purchase Agreement is also subject to, among other things, (i) the accuracy of representations and warranties of Seller and Anaren set forth in the Purchase Agreement, (ii) compliance with covenants of Seller and Anaren set forth in
the Purchase Agreement, and (iii) the absence of a Material Adverse Effect (as defined in the Purchase Agreement) after the date of the Purchase Agreement.
The parties to the Purchase Agreement have made to each other certain representations and warranties, and have agreed to certain covenants and agreements,
including with respect to cooperation, regulatory approvals, the Companys financing of the Acquisition, the conduct and operation of Anaren prior to the closing and similar matters. In addition, the Purchase Agreement contemplates that Anaren
and the Company will enter into certain ancillary agreements in connection with the transaction. Although the Purchase Agreement does not include general indemnification provisions in favor of the Company, the Company has obtained a representation
and warranty insurance policy that will provide coverage for certain representations and warranties of the Seller and Anaren contained in the Purchase Agreement, subject to a retention amount, exclusions, policy limits and certain other terms and
conditions.
The Purchase Agreement may be terminated in certain circumstances, including, among others, if the transaction does not close by June 1,
2018 (subject to extension to September 1, 2018 in certain circumstances). Additionally, either party may terminate the Purchase Agreement upon a breach by the other party of any representation, warranty, covenant or agreement made by such
breaching party in the Purchase Agreement, such that the conditions related to the representations, warranties, covenants and agreements made by such breaching party would not be satisfied and such breach or condition is not curable or, if curable,
is not cured within the earlier of (i) 20 days after written notice of such breach or (ii) June 1, 2018 (subject to extension to September 1, 2018 in certain circumstances). The Seller may also terminate the Purchase Agreement if the Company does
not consummate the Acquisition within three business days after the satisfaction of the closing conditions set forth in the Purchase Agreement and as summarized above. If the Purchase Agreement is terminated under circumstances in which certain
required regulatory approvals are not obtained prior to June 1, 2018 or September 1, 2018, as applicable, the Company may be required to pay to Seller a termination fee of $31.0 million.
The Purchase Agreement has been filed with this Current Report on Form 8-K to provide investors and security holders with information regarding its terms.
Except for its status as the contractual document that established and governs the legal relations among the parties thereto with respect to the transactions described above, it is not intended to provide any other factual, business or operational
information about the parties. The representations, warranties and covenants contained in the Purchase Agreement were made only for purposes of the Purchase Agreement as of the specific dates therein, were solely for the benefit of the parties to
the Purchase Agreement, may be subject to limitations agreed upon by the contracting parties, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors.
Investors are not third-party beneficiaries under the Purchase Agreement and should not rely on the representations, warranties or covenants or any description
hereof as characterization of the actual state of facts or condition of the Company, Anaren, Seller, any of their respective affiliates, or their respective businesses. Additionally, the representations, warranties, covenants, conditions and other
terms of the Purchase Agreement may be subject to subsequent waiver or modification. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Purchase Agreement, which
subsequent information may or may not be fully reflected in the Companys public disclosures.
A copy of the Purchase Agreement is filed as Exhibit
2.1 to this Current Report on Form
8-K
(
Report
) and incorporated herein by reference thereto. The foregoing description of the Purchase Agreement and the transactions contemplated thereby
does not purport to be complete and is subject to, and qualified in its entirety by, reference to the full text of the Purchase Agreement.
Commitment Letter
In connection with the Company entering into the Purchase Agreement, on December 1, 2017, the Company entered into a commitment letter (the
Commitment Letter
) with Barclays Bank PLC (
Barclays
) pursuant to which, subject to the terms and conditions set forth therein, Barclays (i) has committed to provide, and agreed to structure, arrange and
syndicate an incremental senior secured term loan facility under the Companys existing credit agreement, dated as of May 31, 2015 (as amended by that certain First Amendment dated as of September 27, 2016, that certain Second
Amendment dated as of September 28, 2017, and as otherwise amended from time to time, the
Existing Credit Agreement
) in an initial aggregate principal amount of up to $700 million (the
Incremental
Facility
) for the payment of the purchase price contemplated by, and the payment of fees, costs and expenses incurred in connection with, the Purchase Agreement, and, in connection therewith, has agreed to solicit the approvals of the
Required Lenders (as defined in the Existing Credit Agreement) under the Existing Credit Agreement to amend the Existing Credit Agreement to eliminate certain conditions relating to the incurrence of the Incremental Facility; and (ii) as a
backstop for the elimination of such conditions, has committed to provide a senior secured term loan facility in the initial aggregate amount of up to $1.05 billion to refinance the Existing Credit Agreement and to finance, in part, the
purchase price of the Acquisition if the Incremental Facility has not been fully funded at the time of the closing of the Acquisition (the
Backstop Facility
and, collectively with the Incremental Facility, the
Facilities
). The conditions being eliminated pursuant to the above amendment are in furtherance of the certainty of funding with respect to the Incremental Facility and do not reflect any inability to incur the Incremental
Facility absent such amendment. Barclays obligations with respect to the Facilities are subject to certain conditions, consistent with the Purchase Agreement and the Commitment Letter. The Company will pay customary fees and expenses in
connection with obtaining the Facilities. The Existing Credit Agreement contains, and the definitive agreement for the Backstop Facility will contain, among other terms, affirmative covenants, negative covenants, financial covenants and events of
default, in the case of the Backstop Facility to be negotiated by the parties consistent with the Commitment Letter. Neither the closing of the Incremental Facility or the Backstop Facility, nor the receipt of any other financing, is a condition to
the closing of the Acquisition.
From time to time, Barclays or its affiliates have performed, and may in the future perform, various commercial banking,
investment banking and other financial advisory services for the Company, for which the Company pays customary fees and expenses. Barclays is a member of the lending syndicate under the Existing Credit Agreement, and the Company has retained
Barclays Capital Inc. as financial advisor in connection with the Acquisition.
A copy of the Commitment Letter is filed as Exhibit 10.1 to this Report
and incorporated herein by reference thereto. The foregoing description of the Commitment Letter and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, reference to the full
text of the Commitment Letter.